Personal Finance & Money Asked on March 4, 2021
According to various sources, such as this article, Biden has plans to increase the Child Tax Credit to $3000. As I’m aware, this is part of Biden’s stimulus plan, which is still being negotiated. Since it hasn’t passed yet, is it best to hold off on filing taxes, as that could result in a filer owing less taxes or receiving a greater tax refund on 2020 taxes?
If a law does pass that is retroactive, then at worst you could file an amended return to claim the credit.
A more likely scenario, though, is that checks will be mailed to those likely to earn the credit (or there may be some sort of claiming process), with the difference made up for in your 2021 taxes, similar to what they did with stimulus checks. I don't imagine that they would force millions of parents to file an amended return to claim the credit.
An even more likely scenario is that the tax credit will just allow people to adjust their withholding to see the credit in their paychecks, again reconciled when you actually file.
So no, I would not postpone filing your taxes just in the hope that some sort of retroactive tax credit is enacted.
Answered by D Stanley on March 4, 2021
"is it best to hold off on filing taxes"
Probably not.
File "now", and get the current CTC for 2020, so that you have money in hand (or a lower tax bill) now. If the enlarged CTC passes, and it's back-dated to 2020, then file an amended return to get the money.
Answered by RonJohn on March 4, 2021
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